Finance

China plans to revamp finance, tech oversight

Published

2 years ago

March 8, 2023

BEIJING — China plans to overhaul its financial regulatory system by consolidating aspects of the central bank and securities regulator under a new entity, while doing away with the existing banking regulator.

That’s according to a draft released late Tuesday as part of China’s ongoing annual parliamentary meeting, known as the “Two Sessions.” Delegates are set to approve a final version on Friday.

The changes follow similar adjustments to China’s government structure that have occurred roughly every five years over the last few decades. The moves also come as Beijing has increased regulation on parts of the economy that had developed quickly, with little oversight.

The latest plan calls for the establishment of a National Financial Regulatory Administration, which replaces the China Banking and Insurance Regulatory Commission and expands its role.

The new regulator is set to oversee most of the financial industry — except for the securities industry. Responsibilities include protecting financial consumers, strengthening risk management and dealing with violations of the law, the draft said.

There are sectors in China that are ‘naturally consolidating’: Credit Suisse

The China Securities Regulatory Commission’s investor protection responsibilities are set to shift to the new financial regulator.

The People’s Bank of China’s responsibilities for protecting financial consumers and regulating finance holding companies and other groups are also set to shift to the new administrator.

“China’s regulatory reforms will strengthen regulators’ capability to establish and enforce a unified regulatory framework, as well as reduce the room for regulatory arbitrage,” David Yin, vice president, senior credit officer, at Moody’s Investors Service, said in a note.

“In addition, the reform targets to strengthen the central government’s control of financial regulation at the local government level, which will improve regulatory enforcement and reduce local governments’ influence on financial institutions,” Yin said.

Separately, the draft proposed the PBoC consolidate its local branches with greater central control, and changing the securities regulator’s designation within the State Council from one similar to the council’s Development Research Center to that of the customs agency.

“China’s consolidated financial regulatory body is [a] paradigm shift to ramp up oversight of its vast financial system,” said Winston Ma, adjunct professor of law at New York University.

A new data bureau

The proposed changes also establish a new National Data Bureau for coordinating the establishment of a data system for the country and promoting the development of the so-called digital economy, which includes internet-based services.

The proposal did not go into much detail, but noted the new bureau would take on some of the cybersecurity regulator’s responsibilities.

Ma said he expects the new regulatory agencies would develop new approval processes for data-intensive internet companies wanting to go public overseas.

The National Data Bureau is set to operate under the National Development and Reform Commission, which is the economic planning department of the State Council — the Chinese government’s top executive body.

Party-state relationship

The proposed changes to the State Council come as the ruling Communist Party of China is expected to significantly increase its direct control of the government.

Party leaders already fill top government roles. For example, Xi Jinping is general secretary of the party and president of the People’s Republic of China.

Xi is set to formally gain an unprecedented third term as president on Friday.

Over the 10 years of his first two terms, Xi has pushed for unifying the country under the Chinese Communist Party and “Xi Jinping Thought.”

Further changes to increase the party’s control of China’s government are expected to be revealed this month. The draft of changes to the State Council’s structure cited a document — that translates literally from the Chinese text as “Party State Institutional Reform Plan” — passed last week at a regular meeting of the Chinese Communist Party’s Central Committee.

Changes for tech

Changes to the party and state institutions “strengthen the centralized and unified leadership of the Chinese Communist Party’s Central Committee over science and technology work,” State Councilor and Secretary-General of the State Council Xiao Jie said in a supplementary document explaining the proposed structural changes. That’s according to a CNBC translation of the Chinese text.

The changes “establish the Central Science and Technology Commission,” whose responsibilities are borne by the restructured Ministry of Science and Technology, Xiao said.

The State Council restructuring draft released Tuesday led with plans to overhaul the Ministry of Science and Technology, to strengthen its work in areas such as research and national laboratory construction.

China must work faster to achieve self-reliance in tech “in the face of severe international scientific and technological competition and external containment and suppression,” Xiao said.

The Biden administration has increased restrictions on the ability of Chinese businesses to obtain critical tech for the use and development of high-end semiconductors.

The new Ministry of Science and Technology’s responsibilities include resource allocation and supervision, while oversight of agriculture science and biotech are set to be moved to other ministries, Xiao said in the supplementary document.

High-tech development and industrialization plans fall under the Ministry of Industry and Information Technology, the document said.

State-owned enterprises

The proposed changes to the State Council’s structure also called for separating the ownership and operation of state-owned institutions that are overseen by central government financial management, Citi analysts pointed out.

They said they see the move as further leveling the playing field between state-owned and non-state-owned enterprises.

Reports /TrainViral/

Crypto

Bitcoin’s Recovery – the Downturn Is Over

Published

6 months ago

July 16, 2024

The market is currently in a news-driven environment where the prices of cryptocurrencies have been determined by news agenda rather than fundamentals.

Bitfinex analysts have warned crypto investors to be cautious as bitcoin’s (BTC) recovery over the weekend is not a sign that its correction is over; the asset could witness more bloodshed in the near term.

In the latest Bitfinex Alpha report, experts deemed the market’s reaction this week critical, especially as supply alleviated over the weekend could return when traditional markets open.

“No Man’s Land”

Since Saturday, bitcoin has risen almost 10% from $57,600 to $63,000, closing last week in the green. The asset has surged above the 125-day range low of $60,200, which it broke through earlier this month after news of the German government’s massive BTC selling hit the market.

Market sentiment began to improve after reports that wallets linked to the German government were almost empty. However, the positive sentiment may not be sustained for long as the BTC the German authorities moved to trading desks and exchanges are yet to be sold.

While the supply from Germany appears to have been factored into bitcoin’s market price, Bitfinex analysts believe the end of selling pressure depends on how the involved trading desks execute their trades in the coming days.

Although the shift in sentiment underscores the market’s capacity to integrate new information and adjust expectations quickly, analysts think the market’s reaction over the first two trading days of the week cannot be overlooked for two reasons.

First, the low support level in the $60,200 range has now become a potential resistance line. Second, trading patterns over the past three months suggest that weekends are usually favorable for markets, especially on Saturdays when supply pressure seems to subside.

“We are now in no man’s land until we get clear resolution above or below this level,” the analysts said.

A News-Driven Environment

Besides the potential resistance level and three-month weekend trading pattern, the market is currently in a news-driven environment, where the prices of cryptocurrencies have been determined by news agendas rather than fundamentals.

Since selling pressure concerns are not yet completely obsolete due to upcoming Mt Gox creditor distributions, Bitfinex analysts expect such headlines to continue to have some impact on price movements. As such, the analysts urged investors to exercise caution in their trading strategies.

Reports /Trainviral/

Crypto

Bitcoin ETFs Saw $300M in Daily Net Inflows

Published

6 months ago

July 16, 2024

BlackRock’s IBIT led with $117.25 million in inflows on July 15, also being the most traded Bitcoin ETF.

The US spot Bitcoin ETFs recorded a daily net inflow of $301 million on July 15th. This extended their winning streak to seven consecutive days amidst a broader market recovery.

None of the ETFs recorded outflows for the day.

Bitcoin ETFs Rake in $16.11B in Net Inflows Since Jan

According to the data compiled by SoSoValue, BlackRock’s IBIT, the top spot Bitcoin ETF by net asset value, recorded the largest net inflows of the day at $117.25 million. IBIT was also the most actively traded Bitcoin ETF on Monday, with a volume of $1.24 billion. Ark Invest and 21Shares’ ARKB came in close behind with net inflows of $117.19 million.

Fidelity’s FBTC experienced net inflows of $36.15 million on Monday, while Bitwise’s BITB saw $15.24 million in inflows. VanEck’s HODL, Invesco and Galaxy Digital’s BTCO, and Franklin Templeton’s EZBC funds also recorded net inflows. Meanwhile, Grayscale’s GBTC and other ETFs, such as Valkyrie’s BRRR, WisdomTree’s BTCW, and Hashdex’s DEFI, registered no flows for the day.

A total of $2.26 billion was traded on Monday. The trading volume for these ETFs was less than in March when it exceeded $8 billion on some days. Meanwhile, these funds have collectively attracted $16.11 billion in net inflow since their January launch.

What’s Next For Bitcoin?

Earlier this month, bitcoin’s price decline was mainly due to fears of massive selling pressure from Mt. Gox and the German government’s BTC sales.

But the assassination attempt on pro-crypto former US President and presumptive Republican candidate Donald Trump at Saturday’s rally seemed to spark a recovery in the world’s largest digital asset, and experts are bullish on the asset’s price trajectory going forward. Bitcoin surged more than 9% over the past week and was currently trading slightly below $64,000.

Veteran trader Peter Brandt discussed bitcoin’s price outlook, suggesting a potential major rally. He referred to a pattern he terms “Hump->Slump->Bump->Dump->Pump” and highlighted that the July 5 double top attempt was a bear trap, confirmed by the July 13 close. He sees a likely continued upward trend but warned that a close below $56,000 would negate this bullish view.

“Bitcoin $BTC could be unfolding its often-repeated Hump…Slump…Bump…Dump…Pump chart construction. Jul 5 attempt at the double top was a bear trap, confirmed by Jul 13 close. Most likely scenario now is that bears are trapped. Close below $56k negates this interpretation”

Reports /Trainviral/

Crypto

LI.FI DeFi Platform Exploited, Over $8M Lost

Published

6 months ago

July 16, 2024

PeckShield alert reveals LI.FI’s protocol vulnerability is similar to a March 2022 attack, with the same bug recurring.

The decentralized finance (DeFi) platform LI.FI protocol has suffered an exploit amounting to over $8 million.

Cyvers Alerts reported detecting suspicious transactions within the LI.FI cross-chain transaction aggregator.

LI.FI Issues Warning After $8 Million Exploit

LI.FI confirmed the breach in a statement on July 16 via X: “Please do not interact with any http://LI.FI powered applications for now! We’re investigating a potential exploit.” The team clarified that users who did not set infinite approval are not at risk, emphasizing that only those who manually set infinite approvals seem to be affected.

According to Cyvers Alerts, more than $8 million in user funds have been stolen, with the majority being stablecoins. According to on-chain data, the hacker’s wallet holds 1,715 Ether (ETH) valued at $5.8 million and USDC, USDT, and DAI stablecoins.

Cyvers Alerts advised users to revoke relevant authorizations immediately, noting that the attacker is actively converting USDC and USDT into ETH.

Crypto security firm Decurity provided insights into the exploit, stating that it involves the LI.FI bridge. “The root cause is a possibility of an arbitrary call with user-controlled data via depositToGasZipERC20() in GasZipFacet, which was deployed 5 days ago,” Decurity explained on X.

“In general, the risks behind routers, cross-chain swaps, etc. are about token approvals. Raw native assets like (unwrapped) ETH are safe from these kinds of hacks b/c they don’t have approvals as an option. Most users & wallets also no longer do “infinite approvals” which gives a smart contract total control on removing any amount of their tokens. It’s important to understand which tokens you’re approving to which contracts.

This dashboard looks for all transactions of a user that intersects Lifi. Not all of these transactions indicate risk- but you can see how, broadly, integrations & layers of tech (like how Metamask bridge uses Lifi on BSC) can complicate how users do or don’t put their assets at risk. Revoke Cash is the most well known approval manager app.

But it’s also good security practice to simply rotate your address. New addresses start with 0 approvals, so starting fresh by moving your tokens to a fresh address is another good security practice.” – commented Carlos Mercado, Data Scientist at Flipside Crypto.

Recent Exploit Mirrors March 2022 Attack

Further analysis by PeckShield alert revealed that the vulnerability is similar to a previous attack on LI.FI’s protocol that occurred on March 20, 2022. That incident saw a bad actor exploit LI.FI’s smart contract, specifically the swapping feature, before bridging.

The attacker manipulated the system to call token contracts directly within their contract’s context, making users who had given infinite approval vulnerable. This exploit resulted in the theft of approximately 205 ETH from 29 wallets, affecting tokens such as USDC, MATIC, RPL, GNO, USDT, MVI, AUDIO, AAVE, JRT, and DAI.

“The bug is basically the same. Are we learning anything from the past lesson(s)?” PeckShield Alert said in a July 16 X post.

Following the 2022 incident, LI.FI disabled all swap methods in its smart contract and worked on developing a fix to prevent future vulnerabilities. However, the recurrence of a similar exploit raises concerns about the platform’s security measures and whether adequate steps were taken to address the vulnerabilities identified in the previous breach.

LI.FI is a liquidity aggregation protocol that allows users to trade across various blockchains, venues, and bridges.

Reports /Trainviral/